The opinion of the court was delivered by: Bua, District Judge.
The instant action was brought under the Bank Holding Company
Act (BHCA), 12 U.S.C. § 1841 et seq. Plaintiffs seek to
enjoin defendant Conover, the Comptroller of the Currency, from
holding hearings and otherwise taking action on the
applications of defendant Dimension Financial Corporation, a
holding company, to charter 31 national banks. Before the Court
is the plaintiffs' Motion for a Preliminary Injunction. For the
reasons stated herein, the Motion for a Preliminary Injunction
Dimension seeks to establish 31 national banks and has filed
applications to that effect with the Comptroller of the
Currency under procedures set forth in 12 U.S.C. § 21 et seq.
Under such procedures, persons seeking to organize a national
bank must, inter alia, apply for and obtain from the
Comptroller a certificate of authority, or charter, before
banking may be commenced. 12 U.S.C. § 26, 27. Before approval
is given, a hearing is normally held to determine the
appropriateness of the application. Ordinarily, once the
Comptroller determines that the organization of the proposed
bank is appropriate, preliminary approval will be granted.
Only once numerous conditions are fulfilled will a certificate
of authority under 12 U.S.C. § 27 thereafter be issued.
Under 12 U.S.C. § 21, a national bank may only be formed by
five or more "natural persons" and, consequently, may not be
formed by a holding company. Additionally, under the BHCA, a
bank holding company may not obtain ownership or control of a
bank unless approval of the Federal Reserve Board (the Board)
has first been obtained.
In the instant action, the Comptroller has scheduled public
hearings on the applications for the week of August 8, 1983.
The plaintiffs, Deerbrook State Bank and various Independent
Banking Associations contend that before the Comptroller may
take any steps towards granting charters to the proposed banks
including the holding of hearings, either a declaration from
the Board that the BHCA does not apply to the Dimension
proposal or permission from the Board to obtain the proposed
banks must first be obtained. According to the plaintiffs, it
is Dimension's position that the BHCA does not apply to the
instant applications because the proposed banks will not engage
in commercial lending. The BHCA only applies to institutions
which, inter alia, "[engage] in the business of making
commercial loans." 12 U.S.C. § 1841(c). The plaintiffs seek a
preliminary injunction to prevent the Comptroller from holding
the scheduled hearings or taking any other steps toward
chartering the proposed institutions.
The issue presently before the Court is not whether a decision
by the Board is required before the Comptroller may issue a
charter to the proposed institution, but whether such a
decision must be made before the Comptroller takes any steps
whatsoever toward certification. Clearly, the issue of whether
there has been a violation of the BHCA rests within the
exclusive jurisdiction of the Board. Whitney National Bank v.
Bank of New Orleans and Trust Co., 379 U.S. 411, 85 S.Ct. 551,
13 L.Ed.2d 386 (1965). When the Board receives an application
under the BHCA, as plaintiffs have filed in the instant case,
it is required to give notice to the Comptroller. 12 U.S.C. § 1842(b).
Where Board approval is required, the Comptroller is
bound to condition the granting of the charter on subsequent
Board approval. Gravois Bank v. Board of Governors of the
Federal Reserve System, 478 F.2d 546 (8th Cir. 1973). If the
Comptroller does issue a charter before a substantial BHCA
question has been decided, an injunction clearly may issue
until the Board has reached its decision. American Bank of
Tulsa v. Smith, 503 F.2d 784 (10th Cir. 1974).
In the instant case, no charter has been issued by the
Comptroller, nor is there any threat that any charter will
issue in the near future or before several procedural steps are
taken. Indeed, at this juncture, there is no indication that
even a preliminary charter will be granted. The only
occurrence which will happen, should no preliminary injunction
issue, is the holding of a long-scheduled, week-long hearing
which, incidentally, was requested by the plaintiffs.*fn2
In order to grant a preliminary injunction, the Court must
determine that plaintiffs have shown that:
(1) they have at least a reasonable likelihood of success on
(2) they will be irreparably harmed and have no adequate remedy
(3) the threatened injury to them outweighs the threatened harm
the preliminary injunction may cause the defendants; and,
(4) the granting of the preliminary injunction will not
disserve the public interest.
Syntex Ophthalmics, Inc. v. Tsuetaki, 701 F.2d 677, 681 (7th
Cir. 1983); O'Conner v. Board of Education, 645 F.2d 578, 580
(7th Cir.). According to the Seventh Circuit Court of Appeals,
"A preliminary injunction is an extraordinary remedy, available
only to plaintiffs who carry the burden of persuasion as to all
four factors." Signode Corp. v. Weld-Loc Systems, Inc.,
700 F.2d 1108, 1111 (7th Cir. 1983). Within the constraints of such
factors, decisions to grant or deny injunctive relief rest
within the sound discretion of the district court.
Wesley-Jessen Division of Schering Corporating v. Bausch &
Lomb Incorporated, 698 F.2d 862, 864 (7th Cir. 1983).
The plaintiffs have failed to show that they have even a
reasonable likelihood of success on the merits of the instant
lawsuit. Were the issue before this Court whether the
Comptroller may issue a charter to the proposed institutions
before the Board has decided issues exclusively within its
jurisdiction, a different result would clearly be warranted.
See, e.g., Whitney, supra, Marshall & Isley Corp. v. Heimann,
652 F.2d 685 (7th Cir. 1981); American Bank of Tulsa, supra.
However, the issue before this Court, plainly stated, is
whether the Comptroller can be enjoined from taking any steps
whatsoever, including deciding issues which are particularly
within his jurisdiction, while substantial BHCA issues remain